The other “side effect” of vaccines: Pharmaceuticals value soars to more than US $ 1.2 trillion, five times Chile’s GDP

2020 is probably the most complex exercise for humanity since World War II. And all thanks to the Coronavirus, a disease that apparently was born in China, and that leaves a trail of deaths that already total 1.57 million people around the world, 15,777 of them in Chile.

The pandemic led to a severe economic recession, from which only China appears to be spared, and destroyed several trillion dollars in the stock market.

However, in parallel it unleashed a race to develop a definitive vaccine against Covid-19, which was reflected in the rise to unprecedented levels in the value of pharmaceutical companies and laboratories. And the market seems to have its favorites.

This interest, for example, is reflected in the Nasdaq Biotechnology Index, an indicator that groups together biotechnology stocks, which has reached a value of US $ 1.24 trillion (about five times Chile’s GDP) compared to US $ 1.09 trillion on the last day of December.

There are currently more than 240 coronavirus vaccines in development. Pfizer It is probably the company that has had the most public repercussions in recent weeks. First, because it was one of the first to reveal the percentage of effectiveness of its vaccine and, more recently, because it was the first to inoculate its vaccine on a massive scale in the United Kingdom. In addition, it is on the verge of starting the inoculation in the US after the green light from the FDA.

The company’s shares have rented more than 12% this year, more than 10.10% of the industrial average Dow Jones which is located at historical highs, and its stock market value is already climbing to US $ 232,000 million; more than Coca Cola, Nike, Intel and Cisco, to name a few.

True, the rise is not too surprising. But Pfizer is just the tip of the industry iceberg.

Novavax It is another of the laboratories that, with more or less luck, tries to find a vaccine against the coronavirus. According to Bloomberg records, it was worth just over $ 100 million in December last year, less than any IPSA company.

But amid the frenzy to reach a solution to the disease, its shares have experienced a spectacular growth of 2,792% in 2020 and its value already reaches US $ 7,326 million, more than CMPC, Bci and Cencosud.

CureVac It has had a vibrant 2020. And not just because it was launched on the stock market this year, but because, since that milestone, in August, the value of its stock has soared more than 700% to US $ 22.6 billion, more than the sum of Copec and Banco de Chile.

This firm of German origin has strong faces on its side, such as the founder of Tesla, Elon musk, one of the greatest fortunes on the planet. The businessman has worked with CureVac in the construction of RNA micro-factories to search for the vaccine against Covid-19, an “important product for the world.”

Modern is not far behind. The US company focused on drug discovery and development accumulates a jump of almost 700% this year, while its market value has climbed more than US $ 55,090 million, with data as of yesterday.

“We are facing an unprecedented race to develop a vaccine against Covid-19. In this context, an FDA advisory panel on Thursday voted in favor of supporting the Pfizer vaccine, and on the other hand, the Moderna company has shown a high rate of efficacy in the tests of its vaccine, so it would be another of the most demanded for the market, ”said Nicolás Müller, Capitaria’s Deputy Manager of Latam Sales.

In Chile, as in the whole world, there is a lot of expectation around vaccines. The Central Bank, without going any further, considered them in its projection for the Chilean economy 2021 of its last Report.

And apparently it is well aspected for an inoculation scenario. According to a report by Capital Economics analyst William Jackson, Chile is among the few emerging market countries and the only one in Latin America, with a reasonable chance of having a widespread vaccine in 2021.

Only 20 emerging market economies have agreements in place, Capital Economics said, citing data from the Duke Global Health Innovation Center.

Chile has agreements with Oxford (AstraZeneca), Sinovac, Janssen and Pfizer.

“The strategy that the government has implemented, in a timely manner and with the advice of experts, has allowed us to today have guaranteed doses for 16 million people, practically the entire population. And to these four agreements is added that of Covax, an international alliance where the number of doses will increase ”, said the Minister of Science, Andrés Couvé

However, for many experts this sector will not only be attractive for the development of the vaccine against the coronavirus. In some way, pharmaceutical companies and laboratories became more relevant in daily life due to the risk posed by a mutation of the disease or that another similar threat appears right away that puts the global health system back on the ropes.

“Healthcare domains related to digital health, genomics and life extension should have greater potential for long-term growth, given political tail winds, demographic changes, the emergence of chronic diseases related to aging and increasingly high medical costs, “said Julius Baer from the bank.